Statement from the Pacifica iED regarding WBAI

Statement from the Pacifica iED regarding WBAI

Thursday, April 2, 2009

We have received complaints about programming that may be threatening the financial
and legal health of the Pacifica Foundation.  Therefore, following legal advice, we 
are taking preparatory measures to secure our broadcast signals should we need to 
prevent legal liability as a last resort.  These precautionary measures will be taken 
at all five stations under advice of Counsel.  Pacifica is the license holder for all 
five stations and is ultimately responsible for everything broadcast over all of them.

No one on the National Board or at the National Office or at any of our Pacifica 
stations wishes to threaten any high quality, community-based programming at our 
stations that conforms to the Pacifica Mission. 

The Pacifica Foundation is facing a severe financial crisis.  Multi-year downtrending 
listenership at all of our stations has been eroding our membership and net income.  
The economic downtrends in society as a whole are also impacting us.  Restructuring is 
occurring at most of our stations which has already reversed the decline at a station 
or two. 

The National Board as well as Pacifica senior management understands the urgency of 
addressing the shortfalls at WBAI, which are particularly severe.  WBAI is also 
saddled with extremely high overhead mainly due to leases for both the WBAI offices 
and transmitter entered into in better financial times. 

According to James Ross, the Chair of the Pacifica National Finance Committee:

WBAI has operated at a deficit for years. This practice is not supportable and in fact 
is a threat to the Pacifica foundation:

-WBAI owes the foundation at least $800,000 in unpaid central service fees and 
billbacks. This debt has accumulated since 2006.
-Through the first five months of the current fiscal year, WBAI is operating at a 
deficit of at least $30,000 per month, despite layoffs last fall designed to cut costs 
and bring the station to financial stability.
-WBAI's on-air fundraising has declined in effectiveness at a rate of about 12 percent 
per year since 2003. Now the station's drives are close to a month long yet still fail 
to meet budgeted goals.
-WBAI is four months in arrears on its office rent (balance due: $128,072.34).  It is 
also 2 months behind on the rent for the facility that houses the transmitter.  This 
bill comes to approximately $35,000 per month, according to National Office Finance 
Staff.  The total in unpaid rent at WBAI comes very close to $198,000. 

Pacifica no longer has the reserves to underwrite WBAI's continuing deficits. Last 
year the foundation had to take out a line of credit, secured by another station's 
assets, to cover costs unpaid by WBAI. This line of credit has not been paid back, and 
these assets are still frozen. Further, non-payment of bills may lead to involuntary 
bankruptcy, which could be catastrophic for our foundation, given our extremely 
valuable assets, the station licenses.

Currently, we are at risk of being sued for breach of our lease agreements, which 
could have dire consequences.  In the case of the Tower lease where our transmitter is 
located a continuing breach could result in a loss of our signal.

WBAI, however, is in the largest radio market in the U.S.  With a signal that covers a 
population of 19 to 20 million people, improved programming will certainly boost our 
listenership, which will result in increased membership and listener support.  This 
approach is advocated by the Pacifica National Board.  As long as our listeners, staff 
and governance bodies work together to bring needed changes we see no major obstacle 
to a resurgent WBAI that is more vital than ever.

Some staff at the National Office, some Pacifica National Board Directors and the 
General Manager and some staff at KPFK have come forward to offer support and help.  
The GM of KPFA has also been sympathetic and offered support in this effort.  In light 
of that, I have planned to come to New York with our iCFO, LaVarn Williams, along with 
several staff loaned to us from KPFK, to assess what is needed at the station.  We 
also intend to roll up our sleeves, fix what needs fixing, wipe out any backlogs such 
as in mailing out premiums, repair equipment, enhance the website and give a boost to 
WBAI. 

We assume that the vast majority of people associated with WBAI will not only agree 
with our efforts but also offer their help.  In addition, your financial support would 
be much appreciated at this time.

Our success will ensure the financial integrity and continued existence of WBAI. 

In Peace, 
Grace Aaron 
Chair of the Pacifica National Board 
Interim Executive Director of 
The Pacifica Foundation